Understanding 'Zero'

We have a dire need to expand our thinking around the understanding of money and currency. We also need to escape the box of the perceived need for never ending exponential growth. Using a mutual credit system could give us just about what we need to expand our thinking. Here, the concept of 'Zero' is an essential ingredient. Here it's not about the flow of money, or about having more and more – here it is all about relationships!


(Image from FreeFoto.com)

What does “Zero” stand for?
- Zero stands for the sum of all currency in the system. In other words, if one adds up all the negative account balances and then adds all the positive account balances, one should arrive at zero. This will be true as long as a foolproof accounting system is used where every transaction is recorded on both the credit side and the debit side.

- Zero stands for balance. However, that balance won’t be guaranteed if the Zero point is shifted by giving away “free” Points or if the balance is upset by granting larger credit limits than debit limits. As long as balance is kept, Green Dollars in circulation keep their value.
Zero stands for the dynamic centre. In order for a mutual credit system to work, everyone needs to engage in equal and balanced giving and receiving. There are always enough points in the system for trading. Participants need to trade through Zero at least once per year, or even better, several times per year.

- Zero stands for the fact that relationships are more important than numbers. We’re conditioned in this society that “more is better” and we need to “get rich.” Both propositions are meaningless in the context of a mutual credit system. In such a system we find economic security not because we accumulate, but because we build relationships with other people.

- Zero is also the symbol of a circle, which stands for the community of which the participant is a member. In the conventional economy, we must all fend for ourselves in competition with everyone else. In a mutual credit system, we’re all in it together. When creating the means of exchange (Points, Green Dollars or any other unit), we do so ourselves in a transaction with another community member. What counts are only three positions in relation to the system: we’re either in dedication to the community because we’ve consumed ahead of providing something, or we’re in “recognition” to the community because we’ve provided before consuming. We also stay within the limits that we as a community have all agreed to. The community needs all three, and therefore both dedication (debit) and recognition (credit) are valued equally. The only other necessary ingredient is solidarity with the community: when we seek to trade to fulfil some of our needs and wants, we need to look within our own community first (buy local, so to speak) before going into the dollar economy. A mutual credit exchange suffers seriously if members abandon their solidarity with the community.

- And finally, Zero is our balance when we join and Zero is our balance when we leave. We enter the system at Zero, and the only acceptable way out is at Zero again. Otherwise, a convenience to the individual creates a problem for everyone else in the circle.

Understanding and living the concept of Zero require a culture of “we,” a culture of community. Calling the unit of currency in a mutual credit system a “dollar” is unhelpful, because it tricks us into thinking and behaving according to our mainstream competitive consumer culture. Applying the concept of Zero helps maximise trade while preserving equilibrium within the community and supports functional, fulfilling relationships between individuals and the community. By making everyone a winner, a well-maintained equilibrium increases the quality of life for the whole community.